Windows Phone 7: The OS/2 of this generation?

With the highly-capable Nokia Lumia 900 off to a shaky start, the long-term trajectory of Windows Phone 7 remains as uncertain as ever.

Photo credit: Nokia

As I wrote in January and as others such as my ZDNet colleague Larry Dignan have also noted, both Nokia and Microsoft have a whole lot riding on the success or failure of the Nokia Lumia 900. It's the first Windows Phone 7 device that has the teeth to compete with iPhone and Android, but the Lumia 900 isn't off to a great start and the uphill climb for Microsoft and Nokia is getting steeper. Unless something changes, Windows Phone 7 is in danger of becoming an operating system known for its quality in the technology industry but never widely-adopted by the masses. Does this sound familiar?

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The Lumia 900 is good, as I said in my review. It's good enough to replace an iPhone or an Android device for most things. But, it's not significantly better at enough things to drive lots of conversions from iPhone or Android or to get a lot of new smartphone users to pick Windows Phone 7 over the Apple or Google platforms.

If that challenge wasn't daunting enough, a string of bad press and self-inflicted missteps have meant that more obstacles are continuing to stack up against Microsoft and Nokia (and AT&T, the U.S. carrier of the Lumia 900). Here is the litany of problems:

Launch date - We'd been hearing for months that Microsoft, Nokia, and AT&T were planning a huge promotional campaign to bring the Lumia 900 to market. AT&T said the Lumia 900 would get "one of its biggest launches ever." It was going to be Nokia's big re-entry into the U.S. smartphone market. The launch was set for Sunday, April 8. Nokia even hosted a huge launch party in Times Square in New York City on the Friday night before the big launch. Only one problem: they scheduled the launch on a U.S. holiday. Veteran Windows commentator Paul Thurrott posted on Twitter: "Nokia launches Lumia 900 today in US ... On a day when NO retail stores are open (Easter). I give up."

Technical difficulties - The Lumia 900 launched with a wireless flaw that Nokia had to fix and then offer a $100 credit to buyers as a make-good. As CNET reported, "Some early Lumia 900 customers found that their phones failed to get a data connection, an issue Nokia confirmed and said it is fixing. As a peace offering, the company is offering this promotion both to appease existing customers and entice potential new ones, with the $100 fully covering the $99.99 handset."

Retail apathy - While TechRepublic's Bill Detwiler was recently at a retail location asking about the Lumia 900 and the HTC Titan II (another WP7 device that launched on April 8), he pulled out his iPhone 4S to get some information. The salesperson gave him a very confused look and asked, "You're switching from an iPhone to a Windows Phone?" Even worse, I've heard stories from several people who went to retail locations to buy a new smartphone and when they inquired about Windows Phone, the sales associated steered them in another direction. Nokia and Microsoft have reportedly given away 10,000 Lumia 900 devices to AT&T retail store employees in the U.S. to help win them over to the platform.

European disdain - In Europe, where the Lumia 800 (the little brother of the 900) has been on sale since December, representatives of four major wireless carriers said that Nokia Lumia phones weren't good enough to compete against Apple's iPhones or Samsung's Android phones, according to a Reuters report. One telecom executive told Reuters, "If the Lumia with the same hardware came with Android in it and not Windows, it would be much easier to sell." That's a bitter pill considering Nokia was the runaway marketshare leader for smartphones in Europe just a few years ago.

A poll on WPcentral.com found that most of the customers who were buying the Lumia 900 were coming from iPhone (29%) or Android (28%).

Still, the company that Microsoft picked to be its No. 1 hardware partner for Windows Phone 7 is struggling badly. On April 11, Nokia announced the latest in a string of disappointing earnings reports and told financial analysts that things are going to get worse in the immediate future as Nokia phones lose traction against Android devices in emerging markets.

It's not like either Microsoft or Nokia are going to get out of the smartphone business if the Lumia 900 isn't a big hit. But, as I said in January when the Lumia 900 was announced, if this device isn't a hit then Microsoft and Nokia will become an increasingly isolated duo. Without a sign that WP7 is finally gaining momentum, it's doubtful that HTC, Samsung, LG, Dell, or any other hardware manufacturers will jump on the Windows Phone 7 bandwagon.

That will leave Nokia and Microsoft to struggle along for another year or two with low single-digit marketshare in smartphones and little hope of making a significant impact on the mobile market. While that might be a shame -- as I've said many times, Windows Phone 7 is one of the best pieces of software Microsoft has built -- it would not be unprecedented. It reminds me of the situation with OS/2 in the late 1980s and early 1990s. OS/2 was a joint project between IBM and Microsoft to build a next-generation operating system for PCs. Although most technologists judged it a superior piece of software, OS/2 lost to Microsoft Windows, which came to market sooner, had more third-party apps, and won over the hardware manufacturers because they could do more with it to make it their own.

There are still people in the technology industry today who talk about how good OS/2 was and shake their heads when they think about why it wasn't more widely adopted by the public. Unless something happens to change the trajectory of Windows Phone 7, a lot of people in tech could be saying the same thing about it a decade from now.

About Jason Hiner

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the upcoming book, Follow the Geeks.

Full Bio

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the upcoming book, Follow the Geeks.

I am one of those (many) individuals still carrying a feature phone. I have been sitting on the fence for a while deciding which smartphone ecosystem I want to land on. Since I use Microsoft products at work and home the advantage has been with MS for me so that has caused me to wait for MS to catch up. I used Nokia's phones in the 90's and really loved them and would love to see them succeed in the U.S. So, why have I not jumped down off the feature phone fence into the WP smartphone ecosystem pasture now? Well...I am now waiting for:
1. WP8 launch (MS has not made any commitment of backwards compatibility to existing hardware). Its just too close to take the chance of investing in a 2 year contract with hardware that may or may not fully support WP8. WP8 seems like a good entry point for more robust hardware and software.
2. WP8 on LTE (Nokia, HTC...) needs to land on either Verizon or Sprint (my carriers of choice for my area)
3. Nokia's WP platform needs to get past some teething pains - for one, the quality of the camera/pictures from the user reports (Lumia 900) I have read (WPCentral) seems to indicate that it could use some tweaking. Carl Zeiss is a great name but the implimentation (app software?) seems to need refinement. Other issues have been promptly fixed but could there be more?
4. Since Nokia from an investors standpoint seems to be questionable, there needs to be other WP8 hardware choices on Verizon / Sprint to choose from so there are WP alternatives if Nokia were to take a sudden stumble.
If the WP ecosystem can resolve these issues prior to the 2012 Holidays I'm in for 3 WP devices for myself and family. I do think there will be a sudden surge in WP8 sales if this all falls into place by then. If not, I'll probably just buy iPhone 5.

Just how fast did Android catch on in 2008 against a nascent iPhone and the dominant Blackberry? Not fast at all. In fact it was a geek phone that had good word of mouth and a backer with a huge war chest. WP7 is a nice middle ground between Apple's "walled garden" and Androids "wild garden". It's a minimalist, yet beautiful OS that's snappy and runs on a variety of form factors. People just love holding Microsoft up to unreasonable standards. I don't remember anyone else proclaiming Android's doom due to lack of apps or one particular phone manufacturer (as if WP7's fate is tied to Nokia's fate) even though Samsung, HTC and others make Windows Phones.
Mobile is a huge part of Microsoft's strategy and like Internet Explorer and Xbox, they will keep working at it until it succeeds. With Xbox they jumped into a market where they had NO experience, fumbled on their first try and succeeded on their second try outselling 20+ year industry veteran Nintendo and almost 20 year veteran Sony in North America. With mobile, they have a good strategy going forward. They just need to keep wooing the hard core techies with the hardware features and then word of mouth will trickle down to the consumers. They also need buy-in from the largest carrier, Verizon by coming out with phones that are easy to market. Minimalist is good on the OS aesthetic, but the hardware just needs more pizazz. Nokia is a step in the right direction.

Several folks here picked up this phone. Two iPhoners and an Androidist. All three are back with their original phones. This thing was slow, hard to navigate, and childish like. This phone is hardly a comparison to OS/2. OS/2 actually worked great, once it got in IBM's hands. I still have an OS/2 server running that is now on nearly 4 years without a reboot, and a great OS/2 workstation that has more capability and configurability than Windows ever had. These users couldn't get more than a few hours without a reboot on this phone. No thanks, I'll stay with my Samsung Galaxy Tab 10.1, and the Galaxy S with Android.

I was at the OS/2 launch and I was *forced* to use OS/2 for a few weeks after its initial release. It was a disaster. OS/2 was written in '286 assembler code - the 80286 was widely regarded as the kludgiest CPU ever released by Intel (who completely changed things with the 80386 or '386). When released, OS/2 only ran on IBM's PS/2 dsktops. The PS/2 model 50 was a 4MB RAM, 20MB disk desktop with VGA. Problem was that OS/2 had a 20MB install footprint rendering the PC a diskless workstation (because the OS filled the hard disk leaving no room for anything). OS/2 was unstable, expensive (retailed for $1,000/copy), and only ran on PCs (PS/2) that cost 2x the price of a comparable white box machine.
It took IBM 5+ years to produce generic versions of OS/2 that were worth using on white box PCs. By that time Windows 3.x owned the market (at $99/copy) and OS/2 was relegated to niche use by banks and other institutions that only bought from 'big blue'.
So, if WP7 is the new OS/2 - microsoft and nokia don't have a very bright future.
I wish them luck.

Until the phone companies are forced to accept any phone and OS (it's just a SIM card folks!), technology that doesn't fit their marketing plans will languish. It's going to take legislation, but there's too much lobbying money to make that a reality any time soon. Consumers have to demand it, but they're pretty much sleeping sheep, and don't yet realize their rights are at stake. (Occupy Verizon???) Verizon has only 1 Windows phone, so the platform won't take off. Even that one is placed in the back of all the stores in my area, and the salespeople ask "Why do you want WIndows?". Why should I have to worry about it? The Telcos have too much power and an obsolete business model. We forced Ma Bell to use any land line telephone like 50 years ago. No reason the mobile carriers should be allowed to have that old monopoly.

For 12 years i was a Nokia devoted user, my first smartphone was the n86 and then the n97, altough symbian had limitations its was stable, the hardware Nokia produce its of the best quality possible... when they announced that they were switching to WP7 i knew it was their doom, not because i dont like MS is because they lost the lead and the image of being a unique coportation. They were struggling, but with their own weapons and resources, the news about their financial state is just the first of many to come, maybe they will sell their dying corporation to Microsoft, Samsung or Google. It think RIM and Nokia are examples of the mistakes a technology company must avoid:
Uncontrolled change (Nokia)
Not changes at all (RIM)
Thats a pity and the biggest losers are us the users because this will cripple the choices that we have to less flavos and colors (brand speaking).

To this day, I still miss O/S2 and it's config.sys file. Who needs a registry full of cryptic numbers that are so weird when you have a config.sys file you can move to a new machine, save to another location and actually make sense of (plain text anyone?). And I won't even start on comm manager and O/S2 stability, like Novell, we had machines we even forgot existed - they just went about their business, forever, with no reboots required. Pity it needed soo much memory back in the day when memory was so expensive. Win7 is nice, I played with an Enterprise edition for a while and, although no O/S2, it was nice. To be honest I haven't looked at it on a handset yet, but I probably will at least seriously look at it. Because having an orphaned HTC EVO 4G is quite upsetting. Yeah, I know rooting and a custom ROM would get me ICS but, I could also drop a 427 hemi in a Dodge Dart - somethings just shouldn't be.

This just might be the biggest problem if it is, in fact, happening. Salespeople make a large impression on the "clueless"* customer. Customer sees a fun advertisement, whether video or article, about the 900 and thinks, "Gee, I want that. I'm going to go buy one," but then the salesperson steers him or her to another phone, talks up the "other" phone then said customer will most likely go with the salesperson's opinion. An informed customer won't do that, of course, but the clueless* customer will be swayed by the salesperson.
* By clueless I mean a person who hasn't made a firm decision on purchasing the product based on tech reviews, familiarity with hardware and software, and familiarity with the company. A clueless customer purchases things based on the commercial, what his or her friends have, and little else; this customer is easily swayed by the salesperson.

AT&T sucks. Verizion isn't much better but I'm certainly not going to switch provders in order to get the Lumia 900 a year earlier. Until then, I guess my HTC Trophy will have to do. BTW, I made the switch from Android to WP7 just after the Mango update was released and I haven't looked back! I love my WP7(.5).
I can't say that it's hands-down better than the iPhone but the WP7 OS is more appealing to me in some areas and I can't wait to see the integration advancements with the release of Windows 8.
As for my HTC Trophy, I ended up buying it online because the Best Buy Mobile store didn't cary the phone and they kept trying to talk me out of my decision to go Windows. Wrote about it here: [url]http://vinneyk.me/open-book/want-mango-with-that-windows-phone-7-marketing-musts[/url].

Another artfully crafted column to bash a great product.
Now, for the record I remember OS/2 and worked with it. OS/2 really retained it's IBM look and feel. But WIN 7 phone is good. I have an HTC phone running Win 7 phone. Fast, with a well designed interface. I paid 32 bucks for the phone. For my business that is a big plus it ran and auto configured a major Microsoft Cloud application as soon as I accessed the URL. Perfect. With mobile sales force resources consuming much of the IT budget these days, this phone will be a great help to users. Much can be done with one thumb.
I think your article quotes prove that many folks in their positions base their thoughts on hear say, and propaganda. What a way to make business decisions, right.
You should have explained in your article why those responses were bad choices, but that would not have been in line with your purpose.
Those of us in the Business area of the IT industry already know that many people are in the position of "decision maker" because they won a popularity contest.
It's time to get the 17 second thought process folks a good jolt of caffine and show them that Microsoft has the OS on all the devices but also has the apps that generate $$$ to run on all devices. Oh and I have to mention the truly 101, bush league response to a request for a Windows 7 phone I received at a Verizon store.
Verizon, please lose these folks. They make you look lame.

You didn't have to plug your Lumia into a PC for updates. What other smart phone requires that you have to connect to a PC for updates, music, ringtones, etc??? Major failure on the part of Microsoft and Nokia. I love my Lumia 900 but know other people who won't buy them because they don't want to have to plug in every time they need something done. One would think before launching something like this they'd take care of those things. That's what will keep Android and Apple ahead of the game.

Just like OS/2 was, great device but poorly marketed.
The problem with WP is that (1) the carriers aren't buying into it because there's nothing in it for them. Heck, AT&T has had to GIVE the thing away and (2) it's about 12 months too late as users have already bought into either the iOS or Android/Google infrastructure and clouds.
It IS slick. It is beautiful. But I already have a phone that works great for me.
Why would I, as an Android user with a perfectly good phone (HTC Incredible, going on 2+ years) want to have to buy all my apps again, switch to a phone that has minimal support for my stuff in the Googleverse, and have less functionality?
If WP had come out with something this compelling in 2010, I would have jumped, but now it's too little, too late, just as OS/2 was back in its day.
The one thing that MIGHT get me to try WP is if they partnered with somebody like Republic Wireless or one of the off-contract guys and gave me a steal on monthly service, like $20/month for voice/text/data. But then, that's more a gripe with my service provider, not with the phone itself.

The promoting of Windows 8 phones in October, apollo, Is a big factor. I have every intention of getting a Windows phone. But when you're tied to 3-year contracts, why would you get a windows phone now when Windows 8 will be released in October with NFC technology. That would leave you with phone-envy for the next 2-1/2 years of your contract. Unless you cough up the dough to get an unlocked phone 6 months after getting your Lumia 900

I utilize all three, IOS 5.1 (iPad), Android ICS (ASUS), and Mango on an older Focus. I like all three. Do I have a preference? IOS is easy and polished, Android is fun and super customizable, and Windows Phone is just plain slick and super functional for my needs. So when someone speaks poorly about any of them I always think, they are essentially missing the point. Choice is king on earth, when do we ever want to destroy any product based on a few opinions alone. Sure those with Marketing degrees will point to statistics all day long, will reference past poor showings in products like OS2 Warp, and in the end sales rule the day... providing sales are fair. Because MS has burned some people through the years as the preeminent IT software vendor, an anti-MS mini army exists to bad mouth a product they DON'T want to succeed. You have anti-Apple groups, and anti-Google groups as well. Most "anti" anybody types were created by 1 or more events that they didn't feel right about. All these vendors practice their business with a bit of shadiness at times. So none of them are without the need of a good slap on the wrist at times. Anyone that wants ANY of these products to fail based on some past experience should not give an opinion, and opinions should be made based on pure observation of the facts. Are any of the three perfect? No. Concentrate on what's positive, it's really what people care to discover when they venture out looking for a device.

The lack of comments from those who oppose W7 phones and very few from believers, indicates to me there is little interest in the OS. Everyone I talk to about this OS and its implementation in Windows 8 are dissappointed. Only Noobies and those with an agenda or a huge investment in MS are really pushing it.
My take on Microsoft is that it may have finally reached the Novell moment where a great idea and a great vision are being dismissed in order to generate a facade of inovation to keep the dollars flowing. Android and Linux are the new Microsoft of the late 90's. For simplicity we have Apple for the 'get your hands dirty' we now have Android and Java.
It was sad to see Novell lose its vision and now more sad to watch Microsoft ditching their flagship OS, bugs and all, for an alien OS. I'm thinking New Coke.

Jason:
In my view, Windows 8 will have a big hand in changing the trajectory. That's when a wider audience will be introduced to Metro. And I bet that will drive more awareness for Microsoft on the Windows Phone side.
We'll see.
Thanks,
LionelatDell

What boggles my mind the most is how far people seem to go to find something negative to say. "The sky is falling! The sky is falling!" Before the Lumia 900 was released all the articles focused on the release, claiming it *had* to be successful for the platform - and Nokia to survive. Based on the sales we've seen so far, I think it's safe to say it's a smash hit. Still, everyone is screaming from the rooftops that the world is coming to an end.
One of the biggest issues has always been awareness of the platform. Now that a lot of people have a WP in hand, more people will be exposed to it. Considering how positive the reviews are, you can bet people will rave about their phone to friends and family. See how it works?
Personally, I don't think the goal is to make money on the 900. Someone else mentioned the whole "first one's free" thing. I think they hit the nail on the head.

1. I have seen 2 commercials for it...and I'm in Chicago.
2. The commercials don't make it clear what you are looking at...you know it is a Lumia, but nothing about the OS or any real capabilities.
3. The next generation of the operating system is right around the corner.
4. People keep predicting the death of it...stop that and give it a chance.
Tech "Carnacs" and political pundits should maybe back off on the rhetoric and give constructive criticism. Or...maybe we'll find a nice island for you all, give you each a Mr. Microphone and say enjoy the sun tan.

I think there are fundamentals at work here you do not refer to.The cultural form factor and design.The services and attributes.The OS and branding.In a competative market these things have to be right otherwise a slow decline will ensue.My company saw Nokia's decline when it was taken over by MS.MS saw the opportunity of using Nokia to launch an unproven undeveloped Operating system into the mobile market.Nokia has been chopped up its core technologies plundered and exported to california.What is left? A shell of a company with a bad operating system with a very poor brand image.A large number of now poor shareholders with no descern able future possibly facing redundancy.The only option really is to buy back Nokia from MS go with google and oppoint UK managers.

I believe them. Despite the buzz on the net, for me MS is one of last few companies which focuses on technology advancements and pulling best of the current and future thins happening on the internet and every ""social"" crap here. Yes, they dont know a much about best marketing and PR, what has my sympathy too, because of the real work and real usefullnes of IT products of today. I am saying this as IT pro, sw/hw developer who is slightly relucant to internet usage as is growing now. Analogy of WP7 with OS2 seems to be here, but I believe they dont allow to happen the same - there are Windows8 and strategy behind all things they do now and yes, similar analogy can be what happened to Beta and Video2000 videotape systems in history, where cheaper, because of worse VHS was winner. I remember for OS2/Warp on my 386dx/40 with 8M ram back in nineties, before Win95 happened :-). Microsoft never was "revolution" but more carefull "evolution" from quite crappy (but succeeding on market) MS-DOS over Win95, then far better WinNT , 2000, XP, W7 .... and even nonhacked MSDOS apps are able to run still on latest OS. They care for backward compatibility down to simply nonrepairable old bugs in system level, because too much existing apps are dependent even on them sometimes. Just now, I have Android phone. And I am tired. Although his form-factor is very good for me and vendors proprietary touch ITU-T is superior thing, its simply the same mobile computer as WindowsMobile which I used several years before any iThing occured.... To return to subject here - when I tried WP7 (and I have one too, just "migrating" myself here), then I was shocked what is some text on lock screen, from where it come :-). Almost whole week I didnt any investigation, as too busy by real work too. But then I discovered - its my friends invitation to local music action which was sent to me over facebook ! And as I regulary have almost no time to tacke with FB, I am missing my friends a lot, but WP7 helps me to meet them. This is how I want phone will assist me - to be unobtrusive and just working. I am too much work to play with something as a phone. (I dont know how similar things works on iPhone, out of the box). Nice day to all!

The Lumina 900 looks like a great phone and I'd love to recommend it to people... but I can't because what good is a smart phone that doesn't have most of the apps they ask about? Until the development community decides they're going to support it Microsoft is fighting a loosing battle.

Someday, hopefully before they run out of spare cash, Microsoft will realize the only way they can control their smartphone destiny is to build their own ala Apple.
They need to create a new hardware subsystem to enhance their new cloud offerings and to maximize the environment they are developing.

Two main factors- one is it is absolutely true that sales reps at the stores steer customers away from the Windows phones- I has happened to me twice- second extremely frustrating problem is their lack of technical support for their devices- trying to get the Outlook Hotmail connector to work correctly after hours and hours of configuring searching google and reconfiguring still has not corrected the issue not getting Live to sync with Outlook (and I am an IT tech) - all Microsoft products and they will not work well together. We are very dissapointed- if they would even give a one time tech support incident free with the purchase it might pursuade new customers.

As more and more of Google's and Apple's tentacles encroach on people's privacy that might be a reason to switch. Having your address book and photos uploaded to third parties without your knowledge or consent is kinda bad if you ask me. http://bits.blogs.nytimes.com/2012/03/01/android-photos/

I think most windows mobile user have defected to Android where the tinkering and hacking of their phone continues with the aid of XDA-developers.
I got bored of it after 7 years of not having a life. now am a happy IOS/WP7 user.

Microsoft will be at the mercy of hardware vendors when windows 8 for tablets comes out... if the vendors can't produced a good sub $300 tablet for Andriod, I see no reason them doing it for Microsoft... (cost).
Am a windows phone 7 (titan) and an iphone 4 owner. I just hope microsoft delivers on windows phone 8.. if not my ios is my fall back plan.

The only people that should really care are Microsoft and Nokia employees and shareholders. I prefer WP, but I don't think it would kill me to get an Android phone. iPhone is out of the question since there's no keyboard.

Sorry, but I'm not sure what state/country/universe you are living in...
I have one friend who got a WP7, and mainly because he thought he could use a piece of software on it that worked on WinMo (when he found out it didn't work on there he kept the phone, mainly because he just makes calls). Otherwise, my friends have all examined the WP7, but chose iPhone or Android. NONE of them really liked the tiles because it was very different from anything they are used to. On your computer you have icons, you click an icon and a program opens. This is exactly the experience you get with iPhone or Android. Plus, the silly truth is, they also really liked being able to put a background behind their icons, and they would re-arrange the icons around the background to see the background as much as possible.
I don't know where WP7 is a "smash hit", but it's certainly not where I live.

Nokia and by association, Microsoft are shooting themselves in the foot here. The tech-minded folk who regularly read this and sites like it are but a small percentage of the market. The truly vast majority of the market base cares about a very few things; Is it easy to use, can I make calls, does it have 'cool' apps, and most importantly is it expensive?
Nokia has not significantly answered any of these questions in their advertising, which is where the great unwashed begin to decide whether they even want to look at the product or not.
Give the populace information that they can use instead of cute and clever ads that say nothing, and let them decide. And the fanbois and haters be damned.

Microsoft, Blackberry and Palm phones had "apps" before Apple and Google even thought about making phones. Yet it was a mixture of hardware, software and services that made consumers jump ship and attracted new consumers. The apps will come with time. Rome wasn't built in a day and neither was Android or iOS.
There are over 100,000 apps available for WP7 and most of them are the few apps that people actually use and not the 10,000 or so "fart" and clone apps that clutter the Android and Apple app stores.

Microsoft isn't a hardware company, they're a software company and they need to focus on that and leave the hardware to the experts. This is the one thing I hate about iPhone, there's only one form factor and I hate it. The screen's too small and the phone is boring as hell. I want a big-ass slate phone with other features I care about, not features that Apple thinks I should care about. For a company that coined "Think Different", all of their customers sure like thinking the same way.
Nokia is providing the "Official" WP7 flagship hardware, so they'll fill that role and their hardware is flat-out beautiful, destroying Apple from an aesthetic point of view.

When you go to an Apple store, guess what? They are going to support their product, show you how it works, and make sure you are happy with your purchase, or they will, in fact refund your money, letting you return the product. That's the model that is allowing Apple to win. They are not a "third party seller" like "The AT&T Store", or "Best Buy" (Worst Deal) or any of the other "vendors" of cell phones.
Product support is something that everyone wants. Being able to actually have it, is a rarity today, and Apple is demonstrating that if nothing else, that their customers are finding value in that.
The technology crowds that want "open" and "I can hack it" environments, favor Android, and promote them to their peers and go on and on about the "closed" ecosystem of Apple. There are specific features of Android (and WP7) that are dramatically different and more flexible that iOS. The ability to "change things" is where the line can be drawn in the sand between "supportable" and "not supportable" in many cases. Apple is conservative about what it wants to support, because it actually has support staff (count the number in an Apple store verses the AT&T or Best Buy, stores) which they are paying, and it is more cost effective to minimize what they have to "know" and "support".
Microsoft's success with Windows Phone-7 will first about market share, and then about growing a community. Apple started out with the ability to sell smart phones because theirs was the best, no competition, they could just sell. Android only made significant marketshare due to 2-for-1 or give-away marketing by Verizon before they had iPhone. Now MS/Nokia are dealing with a market which has users that have iOS/Android because they can afford a smart phone, and those that can't afford a smart phone at todays $200 for device + 2-year contract (or $600 without a contract) plus $50/month for data/features, or don't want one.
The Windows Phone-7 devices have to be demonstrably, a better deal. Everyone has either an investment in an unlocked phone, or a 2-year contract to ride out. That means that uptake of windows phone-7 will be prolonged by lots of factors, even if it was absolutely the best choice.
The developers will flock to the marketplace to be "the first XYZ app", so that part, will likely happen without "contracts/investments" being a factor.
But, until people really "like" Windows Phone-7, they won't be jumping in that direction.
I personally, value my use of AirPlay as a significant part of why i use Apple products. It's something that I want to have available to me. I have a backyard entertainment system that I can just turn on, and play my music through wirelessly without fuss. I like to walk into the house with my photos and videos on my iPhone, and switch on the TV and use the Apple TV to show my photos and videos to friends and family. At gatherings of friends and family we have "sharing" events through the Apple TV.
There are lots of reason people will keep their iOS devices and Android devices. User interface may not be the biggest "technology" reason why they are not moving to Windows Phone-7.

I've had GMail for 8 years and have never had a bad experience with my data being sold to a third party. Until I do, I have no reason to drop them. I'm also not terribly convinced that MS would do any different.

All of the current MS hardware they sell says differently and they are a hardware company as well. Xbox, Mouse/keyboard, LifeCam, etc. They know what they need to do...they promote optimized PC hardware in their Store.
Even Intel is getting into the hardware game because that's the only way to efficiently utilize their chips and to respond to graphics mfgs. who want to make processors.
Microsoft would have an easier time developing their "world-class" software for a limited hardware set rather than the exponential explosion of sets in current use today.

And I think they're still stamping 3rd party peripherals with their logo so while the employees assembling their products may not receive their paychecks directly from Microsoft, Microsoft does more or less provide some hardware. At first, I was for the "build the phone yourself" vote but now I'm not so sure...I kind of like the "primary partnership" with Nokia angle ... except that I think if Nokia starts to slip financialy, MS will move in to purchase.

Holy smokes, who is going to read this entire comment? Typical Apple person full of himself. Apple Support - all they do is rebrick your device for you when you bring it in. Maybe they'll replace it. Oh, and they'll sell you more stuff, too. Perhaps a $30 cable that is white and pretty?